Morgan Stanley analyst Michael Cyprys sees Legg Mason's (NYSE:LM) reported talks with activist investor Nelson Peltz motivate the mutual fund firm to enact "deeper change" than was being considered in the past.
Those talks "thus could be constructivist and catalyst," he writes in a note.
Sees LM's incentive structure at its affiliates and legacy contracts as a key challenge.
LM has the opportunity to integrated middle and back office functions across all affiliates; reduce financial leverage by paying down some of its $20B debt; restructure legacy contracts and encourage affiliates to pool resources, Cyprys wrote.
Previously: Trian may wage proxy fight at Legg Mason - WSJ (May. 14 2019)
Now read: Trian Fund gets out of Pentair »
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